Jan 28, 2021

GEP Outlook 2021: Supply Chain & Procurement Report

GEP
Supplychain
Procurement
Strategy
Scott Birch
2 min
GEP – a leading provider of procurement and supply chain strategy, software and services – has released its latest global industry outlook report for 2021
GEP – a leading provider of procurement and supply chain strategy, software and services – has released its latest global industry outlook report fo...

GEP, a leading provider of procurement and supply chain strategy, software and managed services to Fortune 500 and Global 2000 enterprises worldwide, has released its GEP Outlook 2021: Supply Chain & Procurement Report.

The report examines the turbulence caused to supply chains during 2020 and looks ahead to the priorities for 2021 and beyond. The new playbook gives guidance on navigating uncertainty, mitigating risk, optimizing costs and driving growth.

“GEP’s 2021 Outlook Report examines why supply chains bent and frequently broke in 2020 in the face of wild swings in consumer demand, trade wars, tariffs, increasing environmental devastation, social inequality and lockdowns,” says John Piatek, GEP’s vice president, consulting, consumer goods and retail, and chairman of the firm’s Thought Leadership Council. 

“This report provides companies with a new playbook to come to grips with a post-pandemic cost structure and supply chain uncertainty.”

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Supply chain and procurement trends for 2021

The report includes valuable insight on:

  • New Playbook – eight essential strategies to build resilience, navigate uncertainty and create advantage as a competitive differentiator
  • Global Business Trends – lessons from 2020, the major changes in political and economic policies and their implications for business leaders
  • Technology and Operations Disruptors – technologies transforming and automating supply chains, and unifying finance and procurement

The executive summary of the report says that while there are inevitably challenges still to come, there is optimism that better times are around the corner. It also highlights how supply chain resilience requires a fundamental shift in the approach to collaboration, with a focus on an ecosystem of partners and transparency.

Sustainability, diversity and inclusion are also high on the 2021 agenda.

The report was written by the GEP Thought Leadership Council, a team of industry and thought leaders, and is available for download.

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GEP continues growth in Asia-Pacific

A leader in multiple Gartner Magic Quadrants, GEP recently announced that PTT Exploration and Production Public Company Limited (PTTEP) – the petroleum exploration and production company based in Thailand, with operations in 15 countries – has selected GEP SMART procurement software platform.

GEP SMART will enable PTTEP to manage its entire Source-to-Pay (S2P) process by digitally transforming its sourcing activities. This includes spend, project management, sourcing, contracting, catalogue management, guided buying and supplier management.

GEP SMART is a unified, cloud-native source-to-pay platform, built on a data-centric foundation with AI at its core.

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May 13, 2021

EY and Harvard Law discuss barriers in Contract Management

supplychain
Procurement
EY
ContractManagement
4 min
EY and Harvard Law School Center discuss Legal Profession survey findings and inefficient contract management procedures among respondent organisations

Contract management is a crucial discussion for procurement professionals as negotiations require a more specific outcome. However, some organisations are experiencing significant barriers to developing their contracting processes. Ernst & Young and Harvard Law School Center have discussed survey results in relation to the current state of contracting and explain where the issues arise.

The Legal Profession survey (part of the 2021 EY Law Survey) highlights the perspectives of 1,000 professionals from across the globe in law, procurement, business development and commercial contracting.

Out of all the major companies surveyed, over half of them say they are experiencing significantly reduced revenue and are missing out on important opportunities due to poorly managed contracting processes. 

Some of the key findings from the survey:

  • 92% of organisations in the survey said they plan to transform their contract handling procedures.
  • 98% of respondents said they face critical barriers in the process of developing contract management.
  • 38% of organisations said they have tried and failed already to implement a better contract management procedure. 
  • 57% said they had experienced less positive revenue due to inefficient contracting systems.
  • 50% of respondents said they had missed profitable business opportunities.

Kate Barton, Global Vice Chair, EY, has expressed her opinion on the survey, “Revenue growth is a fundamental goal for any commercial organisation and effective contracting processes play a crucial role in making that possible. Contracting teams around the world know the value they can bring, and they are making real efforts to transform, but the survey brings into sharp focus a whole range of obstacles that they must navigate if they are to make the improvements they are aiming for.”

What will organisations need to address to develop their contracting methods? 

Cost-Reduction

Many organisations are under pressure to reduce costs, specifically contracting professionals. This is something that nearly all of the survey respondents will be looking to do in the next two years, while a third of larger organisations aim to scale this to a 30% reduction in contracting costs.

Decision-Making Issues

There is a certain lack of clarity among organisations as to who is responsible for contract management. It is unclear to most how the contracting process should be managed; perhaps this could be because it involves an agreement between various stakeholders. Around 59% of legal departments believe they have the leading role, while a similar number of contracting staff also share this view. 39% of business developments professionals believe they are to hold the decision-making power.

Utilisation of Technology

There seems to be a lack of capability among organisations to analyse and manage contracts. According to the survey, around 70% of organisations have a technology strategy in place to manage contracts; the majority still lack the necessary data to utilise it to full capacity. This is likely caused by insufficient knowledge for implementation that is likely a direct result of a skills shortage, which 34% of organisations have reported as an issue that limits them.

Insufficient Contracting Processes 

A lack of a defined contract drafting process will significantly limit how effective the contract will be. Global Legal Managed Services Leader at Ernst & Young, John Knox, explains, “the importance of getting contracting right cannot be underestimated.” 

Around 49% of survey respondents say they don’t follow a defined procedure, and 78% say they do not have a system for monitoring contractual obligations. 

Knox says, “with the right transformation efforts focused around people, process and technology, contracting can actually become a business enabler and differentiator. The survey shows that one way in which organisations aim to tackle these challenges is through working with subject matter leaders and external providers.” 

Meanwhile, David B. Wilkins, Lester Kissel Professor of Law, Vice Dean for Global Initiatives on the Legal Profession, and Faculty Director of the Center on the Legal Profession, Harvard Law School, says, “Contracts are at the core of every business. They determine how growth happens and how risks are managed. It is therefore absolutely crucial that organisations have effective systems and processes to manage every aspect of the contracting process, from negotiation and execution to termination or renewal, as well as an accurate understanding of the obligations, benefits, and risks across the entire spectrum of their contracts.
For more procurement insights, check out Procurement magazine.

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